Alucon Public Company Limited · (Piyatida Tangdenchai) Certified Public Accountant Registration...

Alucon Public Company Limited

Condensed interim financial statements

for the three-month period ended

31 March 2020

and

Independent Auditor’s review report

Independent Auditor’s Report on Review of Interim Financial Information

To the Board of Directors of Alucon Public Company Limited

I have reviewed the accompanying statement of financial position of Alucon Public Company Limited

as at 31 March 2020; the statements of comprehensive income, changes in equity and cash flows

for the three-month period ended 31 March 2020; and condensed notes (“interim financial information”).

Management is responsible for the preparation and presentation of this interim financial information in

accordance with Thai Accounting Standards 34, “Interim Financial Reporting”. My responsibility is to

express a conclusion on this interim financial information based on my review.

Scope of Review

I conducted my review in accordance with Thai Standard on Review Engagements 2410, “Review of Interim

Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial

information consists of making inquiries, primarily of persons responsible for financial and accounting

matters, and applying analytical and other review procedures. A review is substantially less in scope than an

audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to

obtain assurance that I would become aware of all significant matters that might be identified in an audit.

Accordingly, I do not express an audit opinion.

Conclusion

Based on my review, nothing has come to my attention that causes me to believe that the accompanying

interim financial information is not prepared, in all material respects, in accordance with Thai Accounting

Standard 34, “Interim Financial Reporting”.

(Piyatida Tangdenchai)

Certified Public Accountant

Registration No. 11766

KPMG Phoomchai Audit Ltd.

Bangkok

14 May 2020


Statement of financial position

31 March 31 December

Assets Note 2020 2019

(Unaudited)

Current assets

Cash and cash equivalents 1,292,295 883,873

Trade accounts receivable 3, 9 1,042,583 891,934

Inventories 4 1,225,367 1,352,105

Refundable value added tax 6,661 29,914

Other current assets 17,385 18,427

Total current assets 3,584,291 3,176,253

Non-current assets

Property, plant and equipment 5 3,310,796 3,382,400

Intangible assets 8,572 8,772

Deferred tax assets 30,285 42,886

Other non-current assets 310 312

Total non-current assets 3,349,963 3,434,370

Total assets 6,934,254 6,610,623

(in thousand Baht)

The accompanying notes are an integral part of these financial statements.

2


Statement of financial position


Liabilities and equity Note 2020 2019

(Unaudited)

Current liabilities

Bank overdrafts 583 113

Trade accounts payable 3, 6 241,385 227,963

Contract liabilities 7, 9 27,357 7,124

Other payables to related parties 3 10,342 8,931

Other payables to other parties 143,014 117,118

Deferred income - 460

Current income tax payable 111,762 56,559

Current provisions for employee benefits 20,279 20,095

Other current liabilities 9,569 13,125

Total current liabilities 564,291 451,488

Non-current liabilities

Non-current provisions for employee benefits 494,040 554,077

Total non-current liabilities 494,040 554,077

Total liabilities 1,058,331 1,005,565

Equity

Share capital

Authorised share capital

(43,200,000 ordinary shares, par value at Baht 10 per share) 432,000 432,000

Issued and paid-up share capital

(43,199,986 ordinary shares, par value at Baht 10 per share) 432,000 432,000

Share premium

Premium on ordinary shares Share premium on ordinary shares 254,000 254,000

Retained earnings

Appropriated

Legal reserve 43,200 43,200

Unappropriated 5,146,723 4,875,858

Total equity 5,875,923 5,605,058

Total liabilities and equity 6,934,254 6,610,623

(in thousand Baht)


3


Statement of comprehensive income (Unaudited)

Note 2020 2019

Revenue

Revenue from sales of goods 3, 7 1,449,446 1,471,659

Net foreign exchange gain 67,757 -

Other income 33,357 40,518

Total revenue 1,550,560 1,512,177

Expenses

Costs of sale of goods 3, 4 1,136,053 1,230,705

Distribution costs 3 36,537 35,637

Administrative expenses 3 39,300 39,625

Net foreign exchange loss - 3,528

Finance costs 3 - 813

Total expenses 1,211,890 1,310,308

Profit before income tax expense 338,670 201,869

Tax expense 67,805 40,478

Profit for the period 270,865 161,391

Other comprehensive income for the period - -

Total comprehensive income for the period 270,865 161,391

Basic earnings per share (in Baht) 8 6.27 3.74

(in thousand Baht)

Three-month period ended

31 March


4


Statement of changes in equity (Unaudited)

Issued and

paid-up Share Legal Total

share capital premium reserve Unappropriated equity


31 March 2019

Balance at 1 January 2019 432,000 254,000 43,200 4,813,858 5,543,058

Comprehensive income

for the period

Profit for the period - - - 161,391 161,391

Other comprehensive income - - - - -

Total comprehensive income

for the period - - - 161,391 161,391

Balance at 31 March 2019 432,000 254,000 43,200 4,975,249 5,704,449


31 March 2020

Balance at 1 January 2020 432,000 254,000 43,200 4,875,858 5,605,058

Comprehensive income

for the period

Profit for the period - - - 270,865 270,865

Other comprehensive income - - - - -

Total comprehensive income

for the period - - - 270,865 270,865

Balance at 31 March 2020 432,000 254,000 43,200 5,146,723 5,875,923

Retained earnings

(in thousand Baht)


5


Statement of cash flows (Unaudited)

Note 2020 2019

Cash flows from operating activities

Profit for the period 270,865 161,391

Adjustments to reconcile profit to cash receipts (payments)

Tax expense 67,805 40,478

Finance costs - 813

Depreciation 108,177 115,250

Amortisation 391 398

Employee benefit expense relating to defined benefit plan 24,190 11,748

Recognised deferred income (460) (1,427)

Unrealised gain on exchange (18,402) (2,198)

Losses on inventories devaluation 4 1,563 1,539

(Gain) loss on disposal of equipment (2) 78

Interest income (892) (117)

453,235 327,953

Changes in operating assets and liabilities

Trade accounts receivable (131,191) 36,529

Inventories 125,175 388,025

Refundable value added tax 23,253 23,814

Other current assets 1,933 (6,379)

Other non-current assets 2 2

Trade accounts payable 12,366 (37,205)

Contract liabilities 20,233 1,957

Other payables to related parties 1,411 124

Other payables to other parties 36,115 36,676

Other current liabilities (3,556) (6,780)

Repayment of employee benefits relating to defined benefit plans (84,043) (17,297)

Net cash generated from operating 454,933 747,419

Taxes paid (1) (10)

Net cash from operating activities 454,932 747,409

(in thousand Baht)


31 March


6


Statement of cash flows (Unaudited)

Note 2020 2019

Cash flows from investing activities

Proceeds from sale of equipment 2 614

Payment for acquisition of property, plant and equipment (46,983) (94,182)

Payment for acquisition of intangible assets - (181)

Interest received 1 1

Net cash used in investing activities (46,980) (93,748)

Cash flows from financing activities

Increase in bank overdrafts 470 61

Repayment of short-term borrowings from related party 3 - (50,000)

Interest paid - (324)

Net cash from (used in) financing activities 470 (50,263)

Net increase in cash and cash equivalents 408,422 603,398

Cash and cash equivalents at 1 January 883,873 248,870

Cash and cash equivalents at 31 March 1,292,295 852,268

Supplemental disclosures of cash flows information:

Cash paid for purchase of property, plant and equipment

during the period are detailed as follows:

Total addition of property, plant and equipment during the period 5 36,573 83,263

Add: settlement of payables for property, plant and equipment

previously purchased 24,337 39,027

Less: payables on purchase of property, plant and equipment (13,927) (28,108)

Net purchases of property, plant and equipment paid by cash 46,983 94,182

(in thousand Baht)


31 March


7

Alucon Public Company Limited Notes to the condensed interim financial statements

For the three-month period ended 31 March 2020 (Unaudited)

8

Note Contents

1 General information

2 Basis of preparation of the interim financial statements

3 Related parties

4 Inventories

5 Property, plant and equipment

6 Trade accounts payable

7 Segment information and disaggregation of revenue

8 Basic earnings per share

9 Financial instruments

10 Commitments with non-related parties

11 Event after the reporting period



9

These condensed notes form an integral part of the interim financial statements.

The interim financial statements issued for Thai regulatory reporting purposes are prepared in the Thai

language. These English language interim financial statements have been prepared from the Thai

language interim financial statements, and were approved and authorised for issue by the Board of

Directors on 14 May 2020.

1 General information

The principal businesses of the Company are producing and distributing aluminium containers such as

Aluminium Collapsible Tubes, Aluminium Monobloc Aerosol Cans, Aluminium Rigid Wall

Containers, Aluminium Bottles, Technical Impact Extrusions, Aluminium Slugs (Blanks), Aluminium

Coils, Aluminium Pellets, strips, plates, etc.

2 Basis of preparation of the interim financial statements

(a) Statement of compliance

The condensed interim financial statements are presented in the same format as the annual financial

statements and prepared its notes to the interim financial statements on a condensed basis (“interim

financial statements”) in accordance with Thai Accounting Standard (TAS) No. 34 Interim Financial

Reporting, guidelines promulgated by the Federation of Accounting Professions and applicable rules

and regulations of the Thai Securities and Exchange Commission.

The interim financial statements do not include all of the financial information required for full annual

financial statements but focus on new activities, events and circumstances to avoid repetition of

information previously reported. Accordingly, these interim financial statements should be read in

conjunction with the financial statements of the Company for the year ended 31 December 2019.

The Company has initially applied TFRS - Financial instruments standards and TFRS 16 Lease which

have no material impact on the financial statements.

(b) Use of judgments, estimates and accounting policies

In preparing these interim financial statements, judgments and estimates are made by management in

applying the Company’s accounting policies. Actual results may differ from these estimates. The

accounting policies, methods of computation and the key sources of estimation uncertainty were the

same as those that described in the financial statements for the year ended 31 December 2019.

3 Related parties

Significant transactions for the three-month period ended 31 March with related parties were as follows:

Three-month period ended 31 March 2020 2019

(in thousand Baht)

Parent

Revenue from sales of goods 307,067 332,139

Purchase of raw materials and spare parts 1,785 2,264

License fee 4,181 5,308

Commission expenses 492 650

Other expenses - 105

Interest expense - 812



10


(in thousand Baht)

Key management personnel

Key management personnel compensation

Short-term employee benefit 12,189 13,400

Retirement benefits 328 336

Total key management personnel compensation 12,517 13,736

Balances as at 31 March 2020 and 31 December 2019 with related parties were as follows:

Trade account receivable - related party


2020 2019

(in thousand Baht)

Parent

Takeuchi Press Industries Company Limited 87,639 55,283

Trade account payable - related party


2020 2019

(in thousand Baht)

Parent

Takeuchi Press Industries Company Limited - 1,579

Other payable to related party


2020 2019

(in thousand Baht)

Accrued license fee

Parent

Takeuchi Press Industries

Company Limited 4,181 3,714

Accrued commission payable

Parent

Takeuchi Press Industries

Company Limited 507 543

Accrued management’s

remuneration and other benefits

Key management personnel 5,654 4,674

Total 10,342 8,931



11

Movements during the three-month periods ended 31 March of short-term borrowings from related party

were as follows:

2020 2019

(in thousand Baht)

Short-term borrowings

Parent

At 1 January - 200,000

Decrease - (50,000)

At 31 March - 150,000

Significant agreement with related party

Technical license agreement

The Company entered into a technical license agreement with Takeuchi Press Industries Company

Limited, the parent company. Under the term of the agreement, the parent company agrees to provide

technical assistance inclusive technical information and know-how, equipment for manufacturing and

rights to sell the products. The Company is committed to pay a license and commission fee as indicated

in the agreement. This agreement is valid for 10 years and shall be renewed automatically from year to

year unless either party notifies the other party by a written notice at least 6 months prior to the expiration

of the agreement.

Commitments for purchase of raw materials and spare parts


2020 2019

(in thousand Baht)

Parent

Takeuchi Press Industries Company Limited 4,160 320

Significant memorandum of understanding

On 4 February 2020, the Company entered into a memorandum of understanding with Takeuchi Press

Industries Company Limited to supply aluminium slugs in quantity of about 7,000 MT for the

production of aluminium monobloc aerosol cans and collapsible tubes for a period from April 2020 to

March 2021.

4 Inventories


2020 2019

(in thousand Baht)

Finished goods 179,827 150,779

Work in progress 149,484 135,755

Raw materials 448,047 636,572

Spare parts 207,896 213,954

Goods in transit 244,006 217,375

Total 1,229,260 1,354,435

Less allowance for decline in value (3,893) (2,330)

Net 1,225,367 1,352,105



12

2020 2019

(in thousand Baht)

Inventories recognised as an expense in ‘cost of sales of goods’

for the three-month periods ended 31 March:

- Cost 1,134,490 1,229,166

- Write-down to net realisable value 1,563 1,539

Total 1,136,053 1,230,705

5 Property, plant and equipment

Acquisitions, disposals and transfers of property, plant and equipment during the three-month periods

ended 31 March are as follows:


Acquisitions Disposals Acquisitions Disposals

and transfers - net book and transfers - net book

- at cost value - at cost value

(in thousand Baht)

Land improvement - - 967 -

Building and building improvement 1,840 - 40,370 -

Machinery and equipment 49,128 - 33,749 (693)

Office equipment 565 - 294 -

Vehicles 1,916 - - -

Spare parts 609 - 996 -

Construction in progress (17,485) - 6,887 -

Total 36,573 - 83,263 (693)

6 Trade accounts payable


Note 2020 2019

(in thousand Baht)

Related party 3 - 1,579

Other parties 241,385 226,384

Total 241,385 227,963

Current 241,385 227,963

Total 241,385 227,963

7 Segment information and disaggregation of revenue

The Company has two reportable segments. The following summary describes the operations in each

of the Company’s reportable segments.

Segment 1 Can and tube

Segment 2 Slug

The Company’s operations and main revenue streams are described in the last annual financial

statements. The Company’s main revenue is derived from contracts with customers and recognised at

a point in time.



13

Information about reportable segments

Three-month period Segment 1 Segment 2 Total

ended 31 March 2020 2019 2020 2019 2020 2019

(in thousand Baht)

Revenues from sales 847,481 896,142 601,965 575,517 1,449,446 1,471,659

Gross profit 213,809 200,412 99,584 40,542 313,393 240,954

Unallocated revenues 101,114 40,518

Unallocated expenses (75,837) (78,790)

Finance costs - (813)

Profit before income tax 338,670 201,869

Contract Balances

The following table provides information about receivables and contract liabilities from contracts with

customers.


2020 2019

(in thousand Baht)

Trade accounts receivable 1,042,583 891,934

Contract liabilities

- Current 27,357 7,124

The contract liabilities primarily relate to the advance consideration received from customers for sales

of goods. The Company recognises such contract liabilities as revenue when transferring control of the

goods to the customers.

8 Basic earnings per share

The calculations of basic earnings per share for the three-month period ended 31 March 2020 and 2019

were based on the profit for the periods attributable to ordinary shareholders of the Company and the

number of ordinary shares outstanding during the periods as follows:

Three-month periods ended 31 March 2020 2019 (in thousand Baht /

thousand shares) Profit for the period attributable to

shareholders of the Company 270,865 161,391

Number of ordinary shares outstanding 43,200 43,200

Basic earnings per share (in Baht) 6.27 3.74

9 Financial instruments

Credit risk

Allowance for impairment loss for trade accounts receivable are measured at an amount equal to lifetime

ECLs. ECLs on these financial assets are estimated using a provision matrix based on the historical

credit loss experience, adjusted for factors that are specific to the debtors and assessment of both the

current and forecast general economic conditions.



14

At 31 March 2020

Note

Trade accounts

receivable - carrying amount

Allowance for

impairment

losses

(in thousand Baht)

Related party

Within credit terms 3 87,639 -

87,639 -

Other parties

Within credit terms 801,935 -

Overdue:

Less than 3 months 152,705 -

3 - 6 months 304 -

954,944 -

Total 1,042,583 -

At 31 December 2019 Note 2019

(in thousand Baht)

Related party

Within credit terms 3 55,283

55,283

Other parties

Within credit terms 652,154

Overdue:

Less than 3 months 184,497

836,651

Total 891,934

The normal credit term granted by the Company ranges from 7 days to 90 days.

10 Commitments with non-related parties


2020 2019

(in thousand Baht)

Capital commitments

Contracted but not provided for:

Factory, machinery and equipment 46,677 28,664

Other commitments

Purchase orders accepted by suppliers - within one year 1,060,774 1,506,440

Bank guarantees 25,582 25,582

Total 1,086,356 1,532,022

Bank guarantee

As at 31 March 2020, the Company had commitment with a local bank for letters of guarantee issued

in favour of the Company to the Metropolitan Electricity Authority and the Provincial Electricity

Authority totaling Baht 26 million (31 December 2019: Baht 26 million).



15

Purchase orders accepted by suppliers

As at 31 March 2020, the Company had purchase orders accepted by suppliers for purchase of

aluminium ingot for a total quantity of 21,700 MT (31 December 2019: 27,600 MT), at the price as

determined in purchase orders (31 December 2019: at the price as determined in purchase orders) that

will be delivered from 2020 (31 December 2019: within 2020).

11 Event after the reporting period

At the Board of Directors’ meeting of the Company held on 7 April 2020, the Company’s Board of

Directors approved the appropriation of cash dividends of Baht 7.50 per share, amounting to Baht 324

million, which will be paid to shareholders in May 2020.

Alucon Public Company Limited · (Piyatida Tangdenchai) Certified Public Accountant Registration...

Documents

Transcript of Alucon Public Company Limited · (Piyatida Tangdenchai) Certified Public Accountant Registration...